Q. What are the most expensive stocks in terms of price per share? I’ll bet Warren Buffett’s Berkshire Hathaway Inc. is right up there.
A. If you’ve got it, flaunt it.
Those shares of Berkshire Hathaway you mentioned were further strengthened by the recently announced $19 billion Walt Disney Co. acquisition of Capital Cities/ABC. Cap Cities has long been a large portion of Buffett’s underlying portfolio.
Average price of a U.S. stock these days is about $24, according to research by Interactive Data Corp.
Most expensive U.S. common stocks currently are Berkshire Hathaway, recently selling at around $24,600 a share; Washington Post Co., at around $277; Seaboard Corp., at around $250; Grey Advertising, at around $188; Wells Fargo, at around $180; First Empire State, at around $177; Alleghany Corp., at around $167; Texas Instruments, at around $149; UAL Corp., at around $146; and U.S. Robotics, at around $138.
Five years ago, the average price of a stock was $17, according to IDC. The list of most expensive at that time was headed by Berkshire Hathaway at $7,000; Pacific Bank National Association San Francisco at $265; and Washington Post Co. at $245.
Q-I’m a 69-year-old retired professor with shares of Fidelity Capital & Income Fund and Fidelity Asset Manager. Should I redeem or hold? I don’t need the money now.
A-It’s a good time to ponder other alternatives available in this giant fund family.
Junk bond fund Fidelity Capital & Income Fund should prosper as the economy improves, but don’t hold it unless you understand and accept its inherent risk, advised Eric Kobren, editor of the Fidelity Insight investment newsletter which tracks Fidelity funds.
Willing to buy defaulted junk bonds and private bank debt with a portion of its assets, this $2.2 billion fund takes an active role in the restructuring of these companies. As a result of investing in the “junkier” junk, it boasted an 11.73 percent average annual return over the past three years and is already up 15 percent in 1995.
However, more conservative bond choices might be attractive for someone your age.
“For example, an investor really interested in current income should stick with Spartan Short-Term Government Fund or Spartan Short-term Income, though the yield will be lower and the chance of capital appreciation isn’t there,” explained Kobren.
Meanwhile, diversified asset allocation fund Fidelity Asset Manager had a three-year average annual return of 9.95 percent, though it stumbled last year with a 6.60 percent decline. Kobren currently has this $11 billion fund rated a sell. He prefers either a more conservative choice such as Fidelity Puritan Fund, or somewhat more aggressive Fidelity Equity Income II or Fidelity Fund.
“Fidelity Asset Manager accomplished remarkably high returns in past years by taking some risks and using foreign funds, foreign currencies and commodities,” explained Kobren, noting that many shareholders had been unaware of those risks. “Last year those risks turned out not to be so successful, and this might be a good time to consider other alternatives.”
Q-I regularly read your column and you always assure investors of the safety of U.S. Savings Bonds. However, I understand the government doesn’t have a policy of notifying owners, heirs or estates of matured savings bonds. How much of the national debt is attributed to such unclaimed paper in Uncle Sam’s pocket?
A-According to the Treasury Bureau of the Public Debt in Washington, D.C., the total amount of matured and unredeemed debt is $2.3 billion. About $2.2 billion is U.S. Savings Bonds.
“That’s a small portion of the $4.9 trillion national debt,” said Pete Hollenbach, a Treasury spokesman, who maintains that such savings bond debt is actually in the hands of investors. “It’s as high as it is because people don’t pay attention to when their savings bonds mature, so we always strongly urge investors to keep track of their holdings.”
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Andrew Leckey, who co-anchors the “Today’s Business” program on the CNBC cable television network each weekday from 5 to 7 a.m., answers questions only through the column. Address inquiries to Andrew Leckey, “Successful Investing,” Suite 332, 2124 Broadway, New York, N.Y. 10023.
